UK Property Market Update Post Covid-19
If there’s one thing the coronavirus lockdown has changed markedly, it’s the mindset of property buyers.
They’ve gone from favouring houses and apartments located close to great commuting links, to houses with large gardens and super-fast broadband speeds. Not surprisingly, there is also a move away from city to rural locations.
Whether this is a long-term change or temporary while the effects of lockdown can still be felt, is debatable. But there is no doubt that potential buyers are looking at properties with future lockdowns in mind.
Buyers Start To Look Northwards
Property portal Rightmove this week noted that the number of buyers looking at villages and towns in more ‘out of the way’ and quieter locations had jumped phenomenally compared to pre-lockdown.
And northern locations were faring far better than their southern counterparts. Only two southern locations made the Rightmove Top 10 Popularity stakes – Hereford (with a 77 per cent buyer increase) and Hastings (56 per cent increase). The Rightmove study also found that family homes with up to four bedrooms were selling well, to the extent that the vast majority – 98 per cent – were achieving their asking prices.
But South Will Lead Property Market Recovery
The north may be currently performing well, but upmarket estate agent Savills predicts this trend will be reversed in time as a result of the economic and practical demands of the jobs market.
A spokesman for the company said he believed that property markets would recover quicker in areas with more resilient jobs markets, such as IT, finance, science and other professional sectors. And these just happened to be in London and the South East. Areas with tourism and hospitality as their main employer, would see the biggest price hits, he said.
Meanwhile, the ‘upper end’ of the property market ie mid-income and luxury property will benefit more from the low interest rates on offer.
Lenders Withdrawing First-Time Buyer Deals
Last week, in their house price index Halifax noted that although house prices fell by 0.2 per cent in May, the average property was still 2.6 per cent higher than in May, 2019.
Despite this there are concerns over lenders pulling 90 per cent and 95 per cent mortgages for first-time buyers. The Coventry Building Society this week offered 90 per cent – but only for four days. Clydesdale, Virgin Money and Accord have all pulled their 90 per cent mortgage deals. HSBC continues to offer them via their branches but those available are snapped up just 30 minutes after going on offer.
Pre-lockdown there were 294 deals offering first time buyers a 90 per cent mortgage for a fixed rate of two years and 137 deals for a five-year fixed rate. By May there were only a total of 35 similar deals. Lenders blamed the shortage of such mortgages on an inability to carry out physical valuations and staff being on furlough.
Many property analysts fear this increased lack of first-time buyer mortgages could prevent the property market from bouncing back post-lockdown. Currently pent-up demand has seen it thriving since restrictions were lifted last month, allowing physical viewings and surveying. Over to you lenders…
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